HAUPPAUGE, N.Y. - Dime Community Bancshares, Inc. (NASDAQ: NASDAQ:DCOM), the parent company of Dime Community Bank, which has demonstrated strong momentum with an 89% price return over the past six months, today announced significant changes to its investment portfolio and the commencement of a legacy pension plan termination.
The company reported that it has sold $379 million of lower-yielding debt securities with an average yield of 1.20% and a duration of 3.3 years. Concurrently, it has reinvested the same amount into higher-yielding debt securities, which have an average yield of 5.08% and a longer average duration of 4.2 years. This strategic move is expected to incur a one-time pre-tax loss of approximately $43 million for the quarter ending December 31, 2024. According to InvestingPro, three analysts have revised their earnings upward for the upcoming period, suggesting potential confidence in the company's strategic decisions.
Additionally, Dime Community Bancshares has initiated payments to eligible participants of a legacy pension plan that is being terminated. This termination is part of the company's efforts to manage expenses effectively. The process will result in an estimated expense of $1 million in the current quarter, with an additional expense of around $2 million anticipated in the first quarter of 2025 when the remaining benefit obligations are distributed.
Dime Community Bancshares, Inc. is the holding company for Dime Community Bank, a New York State-chartered trust company. With assets exceeding $13.7 billion, it holds a significant deposit market share among community banks in the Greater Long Island area. The company, currently valued at $1.5 billion in market capitalization, has maintained dividend payments for 28 consecutive years, offering a current dividend yield of 2.9%. InvestingPro analysis indicates the stock is currently trading near its Fair Value, with additional insights available in the comprehensive Pro Research Report, which covers over 1,400 US stocks.
This financial maneuvering by Dime Community Bancshares and its subsequent effects on its quarterly earnings are based on a press release statement from the company. Investors and stakeholders in the bank may anticipate the impact of these actions on the company's financial statements for the upcoming quarters.
In other recent news, Dime Community Bancshares reported robust growth in its third quarter, with an increase in core deposits, business loans, and a rise in net interest margin. The financial services firm, Stephens, upgraded Dime Community Bancshares' stock from Equal Weight to Overweight, following the company's recent equity raise of $144 million. The revised operating earnings per share estimates for the years 2024, 2025, and 2026 have also seen an increase.
In addition, Dime Community Bancshares announced a public offering of its common stock at $32.00 per share, aiming to raise an estimated $125 million. The net proceeds are expected to support the company's continued organic growth. Amid these developments, the company also made significant amendments to its corporate governance structure, changing how directors are elected during uncontested and contested elections.
These changes are part of Dime Community Bancshares' efforts to align its corporate governance with best practices. Analysts from Stephens express optimism about the company's restructuring plans and recent hiring initiatives, anticipating an improved return on assets and a reduction in the commercial real estate concentration ratio. These are the recent developments in Dime Community Bancshares.
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